He links up with the Iron as they push for promotion over the final two months of the 2017/18 campaign.
The 20-year-old made his debut for the U's in August 2016, coming on as a second half sub at Crawley Town in the Checkatrade Trophy, but has found it hard to break into the first-team squad since.
He completed a successful loan spell with Bostik League Premier side Needham Market earlier this season and will now test himself at a higher level in the National League South.
Diaz is expected to go straight into the squad as Braintree host Wealdstone looking to improve on their current position of sixth in the table.